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The Cincinnati-based retailer's profit fell 54 percent year-over-year to $340 million, or $1.09 a share, in the last three months of fiscal 2019.
Adjusted earnings were $2.12 a share on revenue of $8.34 billion, topping the $1.96 and $8.3 billion that analysts surveyed by Refinitiv were expecting. Sales fell 0.6 percent at stores the company owns and 0.5 percent when sites operated by license-holders were included.
For the full year, Macy’s earned $564 million as sales slid 1.6 percent to $24.56 billion.
“Taken as a whole, 2019 did not play out as we intended for Macy's,” CEO Jeff Gennette said in a statement. “However, we executed well during the Holiday 2019 season."
Sales in the 10 shopping days before Christmas showed a "meaningful" uptick, he said, fueling significant improvements in the last three months of the year.
"Together with disciplined expense management, our solid sales results in the fourth quarter allowed us to deliver stronger-than-expected earnings results," Gennette said. "Importantly, we exited the year with a clean inventory position."
Gains from sales of real-estate assets totaled $162 million pre-tax in 2019, $95 million of which came in the fourth quarter.
Macy's updated the cost of its Polaris strategy, a three-year plan aimed at stabilizing profitability and positioning the company for sustainable, profitable growth, saying it now expects a price tag of $400 million to $420 million. The company recognized $318 million of costs in 2019.
Looking ahead, Macy's reiterated its fiscal 2020 sales guidance of $23.6 billion to $23.9 billion. The company also sees adjusted earnings of $2.20 to $2.40 a share.
Macy's shares were down 9.1 percent year-to-date, lagging the S&P 500's 0.2 percent loss.